Monro, Inc. (MNRO) Q1 2020 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen, and welcome to Monro Inc.'s Earnings Conference Call for the First Quarter of Fiscal 2020. At the time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] And as a reminder, ladies and gentlemen, this conference call is being recorded and may not be reproduced in whole or in part without permission from the Company. I would now like to introduce Ms. Maureen Mulholland, Senior Vice President, General Counsel and Secretary at Monro. Please go ahead.

Thank you. Hello, everyone, and thank you for joining us on this morning's call. Before we get started, please note that as a part of the call this morning, we will be referencing a presentation that is available on the Investors section of our website at corporate.monro.com/investor/investor-resources. If I could draw your attention to the Safe Harbor statement on Slide 2 of the presentation, I would like to remind participants on this morning's call, that our presentation includes some forward looking statements about Monro's future performance. Actual results may differ materially from those suggested by our comments today. The most significant factors that could affect future results are outlined in Monro's filings with the SEC and in our earnings release. The Company disclaims any intention or obligation to update or revise any Forward-Looking Statements whether as a result of new information, future events or otherwise except as required by law. Additionally, on today's call, management's statements include a discussion of certain non-GAAP financial measures. Reconciliations of such supplemental information to the comparable GAAP measures will be included as part of today's presentation. With that, I would like to turn the call over to our President and Chief Executive Officer, Brett Ponton. Brett?

Thank you Maureen, and good morning everyone. Thanks for joining us today. I am pleased to kick off our new fiscal year with our sixth consecutive quarter of comparable store sales growth. Our ability to deliver sustainable growth despite more difficult comparisons and unfavorable weather conditions in certain regions reflects our focus on driving operational excellence and consistent execution across our organization. In line with our plans, we continue to make significant progress towards the execution of our Monroe forward strategy, which positions us well to capitalize on the continued momentum in our business. Before diving into our first quarter performance, I would like to thank our teammates whose outstanding work and commitment remain key to our success as we continue to scale our platform for growth. As illustrated on Slide 3, we began fiscal 2020 with solid top line growth, achieving a comparable store sales increase of 0.8% which marked our second consecutive quarter of positive comps on top of positive comps in the prior year period when adjusted for days. This has happened for the first time since the third quarter of fiscal 2011. In line with what we discussed on our last earnings call, we saw accelerated comp sales performance in April as we entered the spring service selling season, but experienced temporary softness in May and to a lesser extent June mainly due to cold and wet spring weather in certain regions. We are encouraged that comparable store sales recovered towards the end of the quarter despite facing tougher year-over-year comparisons and we are pleased to report that we have seen continued improvement into July with comparable store sales up approximately 1% month-to-date. Our positive first quarter comparable store sales performance was driven by higher average ticket, reflecting strong in-store execution as well as sustained momentum in our brake and tire categories, as we continue to capitalize on the optimization of our brake and tire offerings. In addition, we opportunistically shifted sales volume to our non-comp free service wholesale locations in the mid-Atlantic region this quarter, in order to optimize routes, drive cash flow and margin improvement as well as enhance our capacity to serve new customers at our nearby comp store locations. This created a temporary comp sales headwind in the first quarter. Adjusting for this temporary negative impact, our comparable store sales growth would have been approximately 100 basis points higher, or up 1.8% for the first quarter. Importantly, our robust two years stack comparable store sales performance reflects the continued traction of our strategic initiatives and gives us confidence in our ability to deliver sustainable long term growth. Moving onto our performance by category in the first quarter, we experienced a 1% increase in tire comparable store sales, driven by a higher ticket and flat tire volume over year. Tires represent our largest category, and we are encouraged to see that the optimization of our tire assortment, which I'll discuss further in a moment is driving results as evidenced by our solid first quarter performance, and the sustained strength we are seeing in our tire category in the second quarter today. Turning to our service and repair categories, we continue to capitalize on the success of our brake offerings, which was our strongest performing category for the fifth consecutive quarter with an increase of 6% and comparable brake sales despite lapping more difficult comparisons following the launch of our optimized good, better, best, brake packages in the first quarter of last year. In our remaining categories, we saw a positive comparable store sales for alignments, while front end shops and maintenance declined year-over-year. Geographically, we saw strength in our northern markets, which outperformed our southern markets. Lastly, new stores added $19.6 million in revenue, including $16.6 million from recent acquisitions. Moving onto slide 4, acquisitions remain a core pillar of growth strategy as evidenced by the two acquisitions we completed in the first quarter and new acquisitions we announced today. As previously discussed, the acquisition of 40 certified tire and service center stores, and a one distribution center in California represent a major milestone in diversifying and strengthening our store footprint. The acquisition closed during the first quarter of fiscal 2020 and is expected to add approximately 45 million in annualized sales, representing a sales mix of 70% service and 30% tires, tend to be breakeven to diluted earnings per share in fiscal 2020. I am pleased to report that the rollout of our standardized in-store operating procedures and the implementation of Monro University, our cloud based learning management system have led to a very effective and efficient integration process. In addition, as part of our broader consolidation effort, we will be rebranding these stores under the tire choice out of service centers banner to optimize visibility and performance at these locations. Most importantly, we now have a solid platform and a proper corporate infrastructure for further expansion in this dynamic and attractive region. In this regard, we are pleased to announce that we completed the acquisition of two additional stores in California during the first quarter, which are expected to add approximately $3 million in annualized sales further solidifying our strong foundation on the West Coast. Similarly, we continue to diversify our store footprint in southern markets and completed the previously announced acquisition of closed stores in Louisiana and other new state for Monroe early in the first quarter. These locations are expected to add approximately $15 million in annualized sales representing a sales mix of 35% service and 65% tires. We also announced this morning that we have signed definitive agreements to acquire eight locations filling in the recently entered market of Louisiana. These locations are expected to add approximately 12 million in annualized sales, representing a sales mix of 50% service and 50% tires. The acquisitions are expected to close during the second quarter and are expected to be break even to diluted earnings per share in fiscal 2020. Overall, acquisitions announced and completed in fiscal 2020 collectively represent an expected $75 million in annualized sales. Looking ahead, we are well-positioned to continue to execute on a robust pipeline of attractive M&A opportunities and currently have over 10 NDA signed with opportunities ranging from 5 to 40 stores. Lastly, we opened one Greenfield location during the first quarter in addition to the two California stores previously mentioned. Moving on to Slide 5, I would like to take a moment to discuss the tremendous progress we continue to make in executing our Monroe forward strategy. The implementation of our strategic initiatives is driving more consistent in-store execution, which has led to a sustained improvement in customer satisfaction and financial performance. Starting with our initiatives to improve the customer experience, our largest effort focuses on the reimagine imaging of our stores to create a more consistent appearance along with the implementation of standardized in-store operating procedures, which we call our Monroe Playbook. Following the successful reimaging and rollout of our Monroe Playbook at 31 pilot stores in Rochester New York last year, we are now in the process of scaling this initiative. We significantly advanced the refresh of 50 stores in our southern markets during the first quarter and expect to modernize the appearance of approximately 70 additional stores in three other markets in the second quarter. As part of our broader store refresh initiative, we have also identified an opportunity to optimize brand awareness and banner concentration in targeted markets. As mentioned last quarter, our goal is to consolidate our existing nine retail banners into regional power brands and convert service stores just tire stores, where when we identified targeted demographics that favour a tire store format. To this end, we rebranded selected pilot stores to a tire oriented brand in the district in mid-Atlantic region last year. Consistent with our plan to enhance local brand awareness, we will also consolidate our brands and banners as part of a 50-store refresh initiated in the first quarter. Overall, the results of the two pilot programs launched last year are tremendously positive. The outperformance of our pilot stores materialized into comparable store sales growth notably above our chain average in the first quarter of fiscal 2020, as well as a dramatic improvement across key guest satisfaction metrics at these stores. These compelling results reinforce our confidence in the execution of our store refresh and brand consolidation strategy going forward. Building upon this success, we will continue to leverage customer data analytics and local brand awareness to roll out our brand operational standards and increase our relevancy in the marketplace. As we modernize our store portfolio over the next three to five years, we will prioritize both our newly acquired stores and targeted markets where we see the strongest potential for increased visibility and traction of our tire banners in order to achieve the highest possible returns. Turning to Slide 6, our efforts to enhance customer satisfaction are reflected in our average 4.7 star rating during the first quarter, which brings our all-time average star rating to a new high of 4.6 stars as compared to 3.6 stars before we launched our customer satisfaction and online reputation program. We are proud of these results and continue to leverage customer feedback to drive operational improvement and deliver a consistent five star experience in each of our stores. This is further supported by our customer centric engagement initiatives. We're pleased with the progress of our new data analytics based CRM platform and our continuing to invest in data driven customer relationship marketing, and customer acquisition campaigns to meet our current and future customers where they are. Additionally, developing our online presence has been a critical component of our marketing strategy to enhance the level of engagement with our customers. We are pleased to report we have significantly increased our online visibility since the modernization of our retail Websites last year, as evidenced by our Website sessions and listening views doubling year-over-year. Improved content and functionalities also drove a notable increase in our consumer online actions, including, clicks-to-call, driving directions and appointment requests both year-over-year and sequentially. In order to ensure we are capitalizing on these improvements in our marketing and advocacy, we continue to invest in in-store technology in our introducing a new digital phone system which will be rolled out across our store base over the remainder of the fiscal year. Successfully executing on the phone is critical in driving customers to our stores and we are confident this new system will drive greater visibility and more consistent phone execution to better serve our customers. This is a major step to upgrade our network infrastructure and create a unified communication strategy, which we believe will support the ongoing rollout of our marketing initiatives and importantly lead to substantial improvements in the customer experience for years to come. Turning to our omni channel strategy. At the beginning of the first quarter, we announced the expansion of our collaboration with Amazon.com to provide tiering installation services to their customers at over 800 stores across 21 states representing approximately two thirds of our store footprint. We have been very pleased with the smooth rollout of this program launched a year ago and we are on track to expand this program to all road retail locations across 30 states. So building upon the strong foundation we are now preparing for the final phase of our omni channel build out in the second half of fiscal 2020, and look forward to offering our customers the options to view and purchase tires online and seamlessly schedule an appointment or in-store installation. Turning to our initiatives to optimize our product and service offerings, our strategy to provide customers with clearly defined options relevant to all consumer price points drove higher in-store conversion again this quarter, despite lapping the successful launch for a good, better, best merchandising strategy in the first quarter of last year, we continue to see a meaningful year-over-year increase in demand for brakes this quarter. In addition, we remain focused on optimizing our tire assortment to create the best value for our customers and further our goal of becoming the number one destination for tires at any price point. As previously mentioned, we introduced new Tier 2 branded tires last quarter rounding out our assortment mix, while optimizing branded tire margins. To complement our tire portfolio, our private label tires representing approximately 40% of our higher units remain a key competitive differentiator and allow us to provide our customers significant value at opening price point levels. Overall, the optimism of our product and service offering is one of our strategic priorities and we look for opportunities to continue to advance our category management and pricing capabilities going forward. Lastly, I would like to provide an update on our productivity and team engagement initiatives. The personal and professional development of our teammates is one of our key priorities to attract and retain talent. In fact, we view increased teammate engagement and higher satisfaction as key drivers to accelerate productivity throughout our organization. We are in the process of rolling out Monroe University; our cloud based learning management system across our store base. As part of the roll out, we are prioritizing our newly acquired stores to facilitate the onboarding of our new teammates and are pleased to report that the deployment of our Monroe University training platform has been a key tool for the integration of our California stores. Importantly, Monroe University significantly enhances our employer value proposition. The platform is not only designed to provide our 8700 teammates with best-in-class trainings to better serve our customers, but also help them grow and advance their career at Monroe. Our robust curriculum will also prepare them to handle future technician requirements as vehicles become more complex with the increased adoption of technology. Overall, our strong commitment to support our teammates career paths has improved job satisfaction and teammate engagement, which in turn has meaningful re-enhanced our ability to retain talent. We are proud to report that our quarterly turnover has been at the lowest level since fiscal 2016 for the third consecutive quarter, despite the robust labor market. To further enhance store productivity, we are also kicking off the second phase of our store staffing optimization in the second quarter. As we look to create flexibility in our staffing model, we are implementing the cloud based data driven store staffing and scheduling system to drive further staffing efficiency by more accurately rebalancing the level of technical skills in each store, ensuring our stores are staffed with technicians without the appropriate skill level for the services required. To complement this initiative, we will also launch a mobile app allowing our teammates to easily pick up shifts and give them the option to increase their hours and earnings. To conclude, I am very proud of what we've accomplished as an organization since I joined Monroe almost two years ago. I would like to thank our customers and shareholders for their continued support and our teammates for their exceptional work and commitment. I look forward to building upon our strong business momentum. With that, I'll turn the call over to Brian who will provide additional detail on our first quarter financial performance and fiscal 2020 outlook.

Thank you, Brett. And good morning everybody. Turning to Slide 7, we delivered solid top line performance and margin expansion in the first quarter. Sales increased 7.2% year-over-year to a record $317.1 driven by a same store sales increase of 0.8% and sales from new stores of $19.6 million including $16.6 million from recent acquisitions, partially offset by a decrease in sales from closed stores of approximately $0.7 million. The first quarter of fiscal 2020 had 90 selling days in line with the previous year period. Gross margin increased 80 basis points to 40.4% in the first quarter of fiscal 2020, from 39.6% in the prior year period. This increase was largely due to the continued benefits from the optimization of our store staffing model and product and service offerings as well as from leverage from higher comparable store sales, partially offset by the impact of sales mix from the free service tire acquisition. Operating expenses for the quarter increased $7.6 million and were $91.8 million or 28.9% of sales as compared with $84.2 million or 28.5% percent of sales in the prior year period. The year-over-year dollar increase includes expenses from 87 net new stores. Our operating income for the first quarter was $36.4 million which increased by 10% as compared to operating income of $33.1 million for the same quarter last year, and increased as a percentage of sales from 11.2% to 11.5%. Net interest expense for the quarter increased $0.6 million as compared to the same period last year. Weighted average debt outstanding for the first quarter of fiscal 2020 increaed by approximately $18 million as compared to the prior year period. The increase is primarily related to an increase in finance lease debt reported in connection with our fiscal 2020 acquisitions and Greenfield expansion. The weighted average interest rate for the first quarter increased by approximately 30 basis points year-over-year largely due to the higher interest expense associated with finance leases. Our effective tax rate was 23.1% for the first quarter compared to 22.7% for the same period last year. Net income for the first quarter was $22.6 million compared to $20.6 million in the prior year period. Diluted earnings per share were $0.67 including $0.01 per share of one time incremental costs related to increased acquisition activity in the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019. This compares to $0.62 in the prior year period, which included $0.02 per share and onetime costs related to Monroe forward investments. Excluding these onetime items, diluted earnings per share were $0.68 for the first quarter of fiscal 2020 compared to $0.64 in the prior year period, representing a 6% year-over-year. Lastly, we opened one Greenfield location during the quarter in addition to the two California stores previously mentioned. As a reminder, Greenfield stores include new construction as well as the acquisition of 1 to 4 store operations. These locations are expected to add approximately $1 million each in annual sales. As of June 29, 2019 the company had 1251 company operated stores and 98 franchise locations, as compared with 1164 company operated stores and 98 franchise locations as of June 30th 2018. During the quarter, we added 55 company operated stores and closed one store. Turning to slide 8, as we continue to execute on our growth strategy we remain committed to our disciplined approach to capital allocation. Our capital expenditures were $14 million in the first quarter of fiscal 2020 of which approximately $1 million was related to investments in our Monroe forward initiatives. Our Monroe forward strategy is progressing on track and we continue to expect an incremental $75 million in capital expenditures above our normal run rate over five years to support investments in story image and technology. Additionally, we will continue to execute on accretive acquisition opportunities which is a pillar of our growth strategy. During the first quarter, we spent approximately $55 million on acquisitions, including one to four store acquisitions completed as part of our Greenfield expansion strategy. We are also committed to returning capital to shareholders through our dividend program and paid about $7 million in dividends during the first quarter. Finally, we remain focused on maintaining a solid balance sheet with ample flexibility to support our growth and profitability initiatives. We entered the first quarter with strong leverage ratios and have ample room under our financial covenants. We generated approximately $58 million of cash flow from operating activities during the first quarter of fiscal 2020. Debt under our revolver increased by approximately $22 million during the first quarter. Before moving on to our guidance, I would like to note that we adopted the new lease accounting standard during the first quarter of fiscal 2020, which requires substantially all leases to be recognized on the balance sheet. The adoption of this new standard had a material impact on our balance sheet due to the recognition of operating lease, right of used assets and liabilities. However, it did not have a material effect on our net income or cash flow. Now turning to our outlook for fiscal 2020 on Slide 9, we have updated our fiscal 2020 comparable store sales guidance range to an increase of 1% to 3% to reflect the unfavorable weather conditions in certain regions that negatively impacted comparable store sales trends fiscal year to date. This compares to our previous guidance, which called for an increase of 2% to 4%. Based on the updated comparable store sales guidance, and the contribution from today's announced acquisitions, we now anticipate fiscal 2020 sales to be in the range of $1.285 billion to $1.315 billion, an increase of 7.1% to 9.6% as compared to fiscal 2019 sales. This compares to the previous sales guidance range of $1.295 billion to $1.325 billion. Our guidance assumes stable overall tire and oil costs compared to fiscal 2019 amid ongoing macro concerns including global tariffs and other material cost pressures, our vertically integrated and diversified supply chain continues to drive our cost leadership position and remains a key differentiator in our industry. As we've mentioned previously any tire in oil cost increases not mitigated by our differentiated supply chain are expected to be passed on to consumers. However, any such costs and related consumer price increases are not assumed in our fiscal 2020 guidance. Based on these assumptions, we expect to generate earnings growth on a comparable store sales increase above approximately 1%. Overall, we continue to expect fiscal 2020 earnings per diluted share to be in the range of $2.55 to $2.75 representing earnings growth of 8% to 16%. This guidance includes approximately $0.04 to $0.06 in accretion from fiscal 2019 acquisition. Acquisitions announced and completed in fiscal 2020 are expected to be break even to diluted earnings per share during the year. At the midpoint of our guidance range, we expect an operating margin of approximately 11.3%, interest expense to be approximately $30 million, depreciation and amortization to be approximately $67 million and EBITDA to be approximately $215 million. We expect capital expenditures to be approximately $65 million this year. This guidance reflects an effective tax rate of approximately 23.5% and is based on 34 million diluted weighted average shares outstanding. As always, our guidance does not assume any future acquisitions or Greenfield store openings. I will now turn it over to Brett to provide some closing remarks before we move onto Q&A.

Thanks, Brian. In summary, we had a solid start to the year. We delivered our sixth consecutive quarter of comparable store sales growth, driven by improving execution across our business and are pleased to see this continue through July. Our Monro Forward initiatives are progressing on schedule and we firmly believe the strong traction of our re-imaged location underscores the success of our strategy. Importantly, we are continuing to execute our disciplined acquisition strategy and we are making solid progress integrating our new West Coast operations. Looking ahead, we are confident in our outlook for fiscal 2020 and we believe our commitment to operational excellence coupled with the execution of our growth strategy will drive continued value for our shareholders. With that, I will now turn the call over to the operator for questions.

Thank you. [Operator instructions] Thank you. Your first question comes from Brian Nagel, Oppenheimer. Go ahead, please.

Hi, good morning.

Good morning, Brian.

Congrats on the continued progress on your reposition. The first question I want to ask just on top line, maybe a couple of parts to it, but you discussed obviously sales in the fiscal first quarter and then sales quarter-to-date in fiscal Q2. So as we look at that I guess let's call it July performance. Is Monro still facing external pressures from weather or other factors? So I'm getting that is -- that 1% should we think about that is a decent run rate or is that still being held by the external factors? And the second question I have for you -- relatively early in the year, you've trimmed some -- somewhat you are not too dramatically, but somewhat your sales guidance for the year, how should we interpret that? It's just you're thinking towards the overall environment is what's your internal initiatives?

Sure. Brian, I’m going to start with, I think we don't like to talk about the weather in our business, of course, but I think it's difficult to ignore the fact there is a realistic impact that it has on the tire and out-of-service space. And first on our quarter one performance, pleased with how the quarter started in April and we came out of the gate pretty strong and we would characterize the weather backdrop is being very consistent with what we saw last year in April, which was kind of a slow start to the spring selling season. It continued into May, first that -- I mean throughout May, end of June as we had led -- as we think about July going forward, and as it relates to our guidance for the year, as we think about our business first half, second half, we knew coming into this year that are comparable, our comps were a little bit harder in the first half of the year and get progressively easier in the second half. So although we didn't provide quarter-to-quarter guidance this year, as you know. We were fully expecting a little bit harder start to the year and as our initiatives mature, we get more stores reimage, which we're pleased with the performance of that. We feel pretty confident in our full-year guidance and the comp sale guidance we provided today is basically a reflection of our first quarter softness that we had talked about.

Okay. I got it. And then if I could follow up with a I guess, a longer-term or bigger picture question. Clearly we discussed this lot in the past. Your acquisitions are a key part of the Monro strategy. You continue to push forward successfully with your acquisition strategy. The question I have though was given what I have -- just what -- I think most of us consider again putting backdrop of space and now you're pushed into new geographies such as California. Has your -- has the historic range of most of [Indiscernible] changed much or are you still paying basically the same you had historically for these acquired change?

Kind of details in terms of exact multiples that we pay for competitive reasons, of course, but I would characterize it very -- even the values that we're paying to clients there consistent with what we paid historically. We haven't seen measurable appreciation in terms of values that we're seeing. We're very pleased with our entry point in California in particular to acquire a platform in three distinct DMAs with a distribution center at multiples in line with historical averages. We feel pretty good about it. But I look at our pipeline, going forward, I would reiterate what I said last quarter and that's -- this is the most robust pipeline that I've seen since I've been at Monro. And a part of that is, given the fact we've opened up new geography, of course, and deeper South, as we push West and with our West Coast operations that certainly opens the door for a much more robust pipeline. And so we're very pleased with where we're at, how well we're positioned, how quickly we integrated the West Coast operations and have built I think an infrastructure here at our headquarters. It gives me confidence that we can scale this more rapidly.

Thanks a lot and congrats again.

Thank you, Brian.

Thank you. Your next question comes from Bret Jordan from Jefferies. Go ahead please.

This is Mark Jordan on for Bret. Good morning.

Hi, Mark.

Just thinking about your re-image stores, how did they outperformed compared to the company average? Do you have the comp difference there?

We didn't provide details on exactly that. As I mentioned in our prepared remarks, we're very pleased with the performance of the stores, they did significantly outpace the company average. But the reason why we're not going to provide any more detail on that yet, Mark is, if you look at the number of stores that we've kind of completed to this point, it's in the neighborhood of low 40s, with a small sample size like we're seeing and combined efforts across the true reimage along with a pilot market on rebranding, given the small sample size, we're reluctant to kind of get ahead of ourselves if you will and share information, I think it's just not reflective yet of a full-blown rollout. So but having said that, I think we're very encouraged by what we're seeing so far. If I look at the customer satisfaction metrics, which I think are a leading indicator on future traffic trends. We're very encouraged by that. And the outsized performance that we're seeing it in the collective store base relative to our company average is very encouraging as well.

Right. And is that outperformance carrying over into July as well?

To date, yes, it is.

Okay. And we're opening up in three additional markets in this current quarter, are you able to disclose what those markets might be?

We'll disclose the region, we're doing three markets in the Midwest region for reimage and maybe just to provide a little more color on that. Our focus has been leveraging the analytic tool that we've installed in our business to help us prioritize the markets where we believe through a reimaged/rebranding initiative will provide the biggest lift to our sales performance, so needless to say, we are certainly prioritizing in the markets where we feel like we have the best opportunity to do that. And in this particular case, it's going to take us to the Midwest. The other consideration that drives the decisions is certainly weather, we want to move them to Midwestern markets and Northern markets while we still have whether to paint the exteriors of buildings and will redirect our focus as the winter months come around to our Southern markets. And as always, we got to be conscientious I think of acquired stores, because we certainly want to immediately put those stores on the Monro Playbook as well as rebrand them to Monro banner as quickly as possible.

Okay, perfect. Thank you very much. And one quick housekeeping question for Brian, are you able to provide the monthly comp breakdown?

Yes, sure. We were up four in April, down one in May and flat in June.

All right. Thank you very much.

Thanks, Mark.

Thank you. [Operator Instructions] There are no further questions at this time. I would now like to turn the floor back over to Brett. Go ahead, please.

Thank you all for joining us today and for your interest and support of Monro. Our first quarter performance demonstrates our continued focus on driving operational excellence and delivering the consistent 5 star experience to all our customers. We are excited about the prospects across the business for the remainder of the year and look forward to updating you on our continued progress next quarter. Have a great day.